Exhibit 10.6
EMPLOYMENT
AGREEMENT
EMPLOYMENT
AGREEMENT, dated this 3 rd day of May 1996, between
First Federal Bancshares of Arkansas, Inc., a Texas chartered
corporation (the “Corporation”), First Federal Bank of
Arkansas, FA, a federally chartered savings and loan association
and a wholly owned subsidiary of the Corporation (the
“Association”), and Larry J. Brandt (the
“Executive”).
WITNESSETH
WHEREAS, the
Executive is presently an officer of the Corporation and the
Association (together the “Employers”); and
WHEREAS, the
Employers desire to be ensured of the Executive’s continued
active participation in the business of the Employers;
and
WHEREAS, in
order to induce the Executive to remain in the employ of the
Employers and in consideration of the Executive’s agreeing to
remain in the employ of the Employers, the parties desire to
specify the severance benefits which shall be due the Executive in
the event that his employment with the Employers is terminated
under specified circumstances;
NOW THEREFORE,
in consideration of the premises and the mutual agreements herein
contained, the parties hereby agree as follows:
1.
Definitions. The following words
and terms shall have the meanings set forth below for the purposes
of this Agreement:
(a)
Average Annual Compensation. The Executive’s
“Average Annual Compensation” for purposes of this
Agreement shall be deemed to mean the average level of compensation
paid to the Executive by the Employers or any subsidiary thereof
during the most recent five taxable years preceding the Date of
Termination (or such shorter period as the Executive was employed),
including Base Salary and bonuses under any employee benefit plans
of the Employers.
(b)
Base Salary. “Base Salary” shall have the
meaning set forth in Section 3(a) hereof.
(c)
Cause. Termination of the Executive’s employment for
“Cause” shall mean termination because of personal
dishonesty, incompetence, willful misconduct, breach of fiduciary
duty involving personal profit, intentional failure to perform
stated duties, willful violation of any law, rule or regulation
(other than traffic violations or similar offenses) or final
cease-and-desist order or material breach of any provision of this
Agreement. For purposes of this paragraph, no act or failure
to act on the Executive’s part shall be considered
“willful” unless done, or omitted to be done, by the
Executive not in good faith and without reasonable belief that the
Executive’s action or omission was in the best interest of
the Employers.
(d)
Change in Control of the Corporation. “Change in
Control of the Corporation” shall mean a change in control of
a nature that would be required to be reported in response to Item
6(e) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended (“Exchange
Act”), or any successor thereto, whether or not the
Corporation is registered under the Exchange Act; provided that,
without limitation, such a change in control shall be deemed to
have occurred if (i) any “person” (as such term is used
in Sections 13(d) and 14(d) of the Exchange Act) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of the
Corporation representing 25% or more of the combined voting power
of the Corporation’s then outstanding securities; or (ii)
during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board of Directors of the
Corporation cease for any reason to constitute at least a majority
thereof unless the election, or the nomination for election by
stockholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of the period.
(e)
Code. “Code” shall mean the Internal Revenue
Code of 1986, as amended.
(f)
Date of Termination. “Date of Termination”
shall mean (i) if the Executive’s employment is terminated
for Cause or for Disability, the date specified in the Notice of
Termination, and (ii) if the Executive’s employment is
terminated for any other reason, the date on which a Notice of
Termination is given or as specified in such Notice.
(g)
Disability. Termination by the Employers of the
Executive’s employment based on “Disability”
shall mean termination because of any physical or mental impairment
which qualifies the Executive for disability benefits under the
applicable long-term disability plan maintained by the Employers or
any subsidiary or, if no such plan applies, which would qualify the
Executive for disability benefits under the Federal Social Security
System.
(h)
Good Reason. Termination by the Executive of the
Executive’s employment for “Good Reason” shall
mean termination by the Executive within one year following a
Change in Control of the Corporation based on:
(i)
Without the
Executive’s express written consent, the failure to elect or
to re-elect or to appoint or to re-appoint the Executive to the
office of President-Chief Operating and Managing Officer of the
Employers or a material adverse change made by the Employers in the
Executive’s functions, duties or responsibilities as
President-Chief Operating and Managing Officer of the
Employers;
(ii)
Without the
Executive’s express written consent, a material reduction by
the Employers in the Executive’s Base Salary as the same may
be increased from time to time or, except to the extent permitted
by Section 3(b) hereof, a material reduction in the package of
fringe benefits provided to the Executive, taken as a
whole;
(iii)
Without the
Executive’s express written consent, the Employers require
the Executive to work in an office which is more than 30 miles from
the location of the Employers’ current principal executive
office, except for required travel on business of the Employers to
an extent substantially consistent with the Executive’s
present business travel obligations;
(iv)
Any purported
termination of the Executive’s employment for Cause,
Disability or Retirement which is not effected pursuant to a Notice
of Termination satisfying the requirements of paragraph (j) below;
or
(v)
The failure by
the Employers to obtain the assumption of and agreement to perform
this Agreement by any successor as contemplated in Section 9
hereof.
(i)
IRS. IRS shall mean the Internal Revenue
Service.
(j)
Notice of Termination. Any purported termination of the
Executive’s employment by the Employers for any reason,
including without limitation for Cause, Disability or Retirement,
or by the Executive for any reason, including without limitation
for Good Reason, shall be communicated by written “Notice of
Termination” to the other party hereto. For purposes of
this Agreement, a “Notice of Termination” shall mean a
dated notice which (i) indicates the specific termination provision
in this Agreement relied upon, (ii) sets forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of Executive’s employment under the provision so
indicated, (iii) specifies a Date of Termination, which shall be
not less than thirty (30) nor more than ninety (90) days after such
Notice of Termination is given, except in the case of the
Employers’ termination of Executive’s employment for
Cause; and (iv) is given in the manner specified in Section 10
hereof.
(k)
Retirement. “Retirement” shall mean
voluntary termination by the Executive in accordance with the
Employers’ retirement policies, including early retirement,
generally applicable to the Employers’ salaried
employees.
2.
Term of Employment.
(a)
The Employers hereby employ the Executive as President-Chief
Operating and Managing Officer and Executive hereby accepts said
employment and agrees to render such services to the Employers on
the terms and conditions set forth in this Agreement. Unless
extended as provided in this Section 2, this Agreement shall
terminate three (3) years after the date first above written.
Prior to the first annual anniversary of the date first above
written and each annual anniversary thereafter, the Boards of
Directors of the Employers shall consider, review (with appropriate
corporate documentation thereof, and after taking into account all
relevant factors, including the Executive’s performance) and,
if appropriate, explicitly approve a one-year extension of the
remaining term of this Agreement. The term of this Agreement
shall continue to extend each year if the Boards of Directors so
approve such extension unless the Executive gives written notice to
the Employers of the Executive’s election not to extend the
term, with such notice to be given not less than thirty (30) days
prior to any such anniversary date. If the Boards of
Directors elect not to extend the term, they shall give written
notice of such decision to the Executive not less than thirty (30)
days prior to any such anniversary date. If any party gives
timely notice that the term will not be extended as of any annual
anniversary date, then this Agreement shall terminate at the
conclusion of its remaining term. References herein to the
term of this Agreement shall refer both to the initial term and
successive terms.
(b)
During the term of this Agreement, the Executive shall perform such
executive services for the Employers as are consistent with his
title of President-Chief Operating and Managing Officer.
3.
Compensation and Benefits.
(a)
The Employers shall compensate and pay Executive for his services
during the term of this Agreement at a minimum base salary of
$202,800 per year (“Base Salary”), which may be
increased from time to time in such amounts as may be determined by
the Boards of Directors of the Employers. In addition to his
Base Salary, the Executive shall be entitled to receive during the
term of this Agreement such bonus payments as may be determined by
the Boards of Directors of the Employers.
(b)
During the term of the Agreement, Executive shall be entitled to
participate in and receive the benefits of any pension or other
retirement benefit plan, profit sharing, stock option, employee
stock ownership, or other plans, benefits and privileges given to
employees and executives of the Employers, to the extent
commensurate with his then duties and responsibilities, as fixed by
the Boards of Directors of the Employers. The Employers shall
not make any changes in such plans, benefits or privileges which
would adversely affect Executive’s rights or benefits
thereunder, unless such change occurs pursuant to a program
applicable to all executive officers of the Employers and does not
result in a proportionately greater adverse change in the rights of
or benefits to Executive as compared with any other executive
officer of the Employers. Nothing paid to Executive under any
plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of the salary payable to
Executive pursuant to Section 3(a) hereof.
(c)
During the term of this Agreement, Executive shall be entitled to
paid annual vacation in accordance with the policies as established
from time to time by the Boards of Directors of the
Employers. Executive shall not be entitled to receive any
additional compensation from the Employers for failure to take a
vacation, nor shall Executive be able to accumulate unused vacation
time from one year to the next, except to the extent authorized by
the Boards of Directors of the Employers.
(d)
During the term of this Agreement, in keeping with past practices,
the Employers shall continue to provide the Executive with the
automobile he presently drives. The Employers shall be responsible
and shall pay for all costs of insurance coverage, repairs,
maintenance and other incidental expenses, including license, fuel
and oil. The Employers shall provide the Executive with a
replacement automobile of a similar type as selected by the
Executive at approximately the time that his present automobile
reaches three (3) years of age and approximately every three (3)
years thereafter, upon the same terms and conditions.
(e)
During the term of this Agreement, in keeping with past practices,
the Employers shall continue to pay the annual membership dues at
the country clubs which the Executive is currently a member
of.
(f)
The Employers shall provide continued medical insurance in the
Employers’ health plan for the benefit of the Executive and
his spouse until the Executive shall have attained the age of 70,
whether or not the Executive is employed full time by the
Employers, and such insurance shall be comparable to that which is
provided to the Executive as of the date of this Agreement
notwithstanding anything to the contrary in this Agreement and
regardless of whether the Executive is
eligible to
participate in the Employers’ health plan. In the event
of the Executive’s death before he attains the age of 70, the
Employers shall provide the Executive’s spouse continued
medical insurance in the Employers’ health plan comparable to
that which is being provided to the Executive’s spouse at
such time for three years from the date of the Executive’s
death. This Section 3(f) shall not apply if the Employee is
employed full-time by an employer other than the Corporation or the
Association.
(g)
In the event of the Executive’s death during the term of this
Agreement, the Executive’s spouse, estate, legal
representative or named beneficiaries (as directed by the Executive
in w
